2012 (9) TMI 417 - AT - Central Excise

Refund of excise duty paid during investigation alleged that department made them debit the above said amounts in the PLA under coercion and the amount was not voluntarily paid Held that - No duty confirmed against the Respondent and there was not even a Show Cause Notice till the date of hearing - assessee can claim refund against a deposit made voluntarily - they have filed a refund claim would show that the deposit was not made voluntarily but was made under duress. Further even if the deposit is made voluntarily they can claim refund of such deposit as in the case of any other duty payment or duty deposit and the department has no right to retain any amount so long as there is no confirmed duty demand pending against the assessee - appeal filed by the Department is rejected.

Summary

Issues:
Refund claim for excise duty payment made under coercion without confirmed duty demand.

Analysis:
The case involved a refund claim by the Respondent for an excise duty payment made under coercion without any confirmed duty demand against them. The Directorate General of Central Excise, Intelligence initiated an investigation regarding excise duty evasion by the Respondent, who paid Rs. 8.00 lakhs towards potential duty liability during the investigation. The Respondent later applied for a refund, stating that the amount was debited in the Pre-Deposit Account (PLA) under duress, as no Show Cause Notice detailing the duty evasion had been issued to them at the time of payment.

The Deputy Commissioner rejected the refund claim, asserting that the amount deposited was towards the accepted duty liability based on clandestine clearances, which was significantly lower than the alleged duty evasion amount. However, the Commissioner (Appeals) overturned this decision, ordering the refund as there was no confirmed duty demand or Show Cause Notice against the Respondent. The Revenue appealed this decision, arguing that the deposit was voluntary and the investigation was ongoing, supported by a subsequent Show Cause Notice issued.

The Tribunal considered both parties' arguments and concluded that the Respondent could claim a refund even if the deposit was made voluntarily, as long as there was no confirmed duty demand pending against them. The Tribunal emphasized that the mere act of filing a refund claim indicated that the deposit was not voluntary but made under duress. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeal filed by the Revenue, stating that the department had no right to retain any amount without a confirmed duty demand.

In summary, the Tribunal ruled in favor of the Respondent, allowing the refund claim for the excise duty payment made under coercion in the absence of a confirmed duty demand, highlighting the importance of the voluntary nature of the deposit and the necessity of a confirmed duty demand for the department to retain any amount.